The Conference Board significantly revises lower its estimate of Chinese leading economic indicators from +1.7% to +0.3%.

The IMF warns about Austrian supervision of foreign currency loans.

The SF Fed says state fiscal crises will get worse before they get better.

Greek and Spanish unions are either striking or preparing to strike.

This string of overnight events all point to a Risk-Off theme that started yesterday with concerns over the ECB 1 year lending facility. This led to a drop in the euro against all major currencies and a new low against the Swiss franc. This 24-48 hour newsflow also occurred after the G20 and when the euro had recovered to its highest level since the end of May. So where does this leave us?

The European Debt Crisis - See Complete Coverage

The events that are coming up continue to evolve around the European sovereign debt crisis and US employment growth.

Thursday, we have the ECB ending its 1 year lending facility LTRO and borrowers must now shift to shorter term funding facilities. ECB council member Ewald Nowotny said, “The decision not to renew the 12-month tender is part of a long-term exit strategy.” Neither the forcing of banks into shorter term lending nor the ECB exiting during a time of crisis is good for the currency.

Friday will bring the US employment data and private payrolls are expected to be up 111k. Last month, markets were disappointed by a paltry 41k increase in private payrolls and contributed to “Risk-Off” theme for the month. I think one outlier that we have to watch for is what happens to the unemployment rate since the US government stopped extended jobless benefits. The risk is that people drop out of the labor force and the unemployment rate drops 1-1.5% because of this process.

From here until the end of July, the results of the European bank stress tests are released. Today, we had some leaks saying that Deutsche Bank, Commerzbank and BayernLB have passed European stress tests to see how they could handle shocks to the financial system, sources familiar with the matter told Reuters. This is odd because I don’t think the group doing the tests has set the metrics or the banks they are going to stress test yet. Again, Italian, French and Spanish banks are the ones that appear to be of most concern to the markets.

Debtor Nations

Finally in August, there is the IMF review of Greece to see if they are meeting all the conditions for austerity that allows them to borrow from the IMF and the European Union loan fund.

Currently, investors have shut out Greece from the bond markets due to concerns over their fiscal deficits. If Greece is deemed to be non-compliant, then they will essentially be in default as they are blocked from borrowing.

If these all have negative outcomes, then the euro will continue to test new lows, the equity markets will continue to test new lows and the bond markets (excluding southern Europe) will continue to put in new highs.

________________________ Andrew B. BuschDirector, Global Currency and Public Policy Strategist at BMO Capital Markets, a recognized expert on the world financial markets and how these markets are impacted by political events, and a frequent CNBC contributor. You can comment on his piece and reach him hereand you can follow him on Twitter at http://twitter.com/abusch.